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Is GoPro Inc's Cloud Platform Finally Here?

Leaked documents reveal how GoPro’s cloud platform works, but will the service boost sales of the Hero 5?

GoPro's(NASDAQ:GPRO) upcoming Hero 5 camera should be tethered to a new cloud platform called "GoPro Plus," according to a recently leaked manual for the device. Users are instructed to download the new Capture app on iOS or Android, then follow the on-screen instructions to connect their cameras to the app.

Image source: GoPro.

First-time users will need to subscribe to GoPro Plus. To upload content to the platform, they click a cloud icon within the app and connect the camera to a charger to start the upload process. After the content is uploaded, users can access the cloud-based content from the Capture app, download it to their phones, and use Quik or Splice for editing and sharing.

Will this new platform be a major selling point for the Hero 5, which will reportedly also feature built-in waterproofing, a GPS, and voice commands? Or will the GoPro Plus fail to deliver a seamless cloud backup experience comparable to Apple's (NASDAQ:AAPL) iCloud or Alphabet's (NASDAQ:GOOG)(NASDAQ:GOOGL) Google Photos?

GoPro wants users to leave the "dark forest"

GoPro CEO Nick Woodman has repeatedly stated that the company was leading customers into "a dark forest" with too much footage and no efficient ways to backup, edit, and share their content. He also compared GoPro's cameras to "iPods without iTunes."

Woodman first teased the development of a cloud platform last June, but didn't offer any technical details. This February, GoPro signed a collaborative patent licensing agreement withMicrosoft(NASDAQ:MSFT) for "certain file storage and other system technologies," fueling speculation that GoPro could tether its cameras to Microsoft's OneDrive platform.

The following month, GoPro acquired Quik and Splice for over $100 million. Quik enabled users to stitch together photos, videos, and music into a single video on the smartphone, while Splice offered PC-grade video editing tools for smartphones. The revelation of GoPro Plus indicates that both apps will play a crucial role in bridging the backup process with the sharing one.

Image source: GoPro.

Why GoPro Plus doesn't really solve anything

But the key problem with GoPro Plus is that the process seems more complicated than the cloud backup process on smartphones. When iOS and Android users take photos or videos, the content is automatically uploaded to iCloud or Google Photos, respectively, once a Wi-Fi connection is detected. For most users, this means when their phones automatically connect to the Wi-Fi network at home, at work, or at the coffee shop.

GoPro Plus users, however, must plug the Hero 5 into a charger, wait for the content to be uploaded, then download the content to their phones again for editing and sharing. These extra steps will seem cumbersome to mainstream smartphone users -- a key demographic which GoPro has repeatedly failed to reach.

But it could boost GoPro's expenses

It's unclear if GoPro will charge users to "subscribe" to GoPro Plus. If it charges a fee, it would throttle the adoption rate among its own users. But if it offers the service for free, it risks boosting its operating expenses significantly.

A single minute of compressed 4K video at 30fps typically requires roughly 375MB of storage. A 1080p video at 60fps requires about 200MB per minute. This means that if a user uploads full-resolution videos to GoPro Plus, the upload times will be long and easily gobble up dozens of gigabytes per video.

Cloud storage is getting cheaper, but it would still be expensive to host a few hundred gigabytes of photos and videos per user. That's why Microsoft reduced the amount of free storage on OneDrive from 15GB to 5GB earlier this year.

Google Drive still offers 15GB of free space, along with unlimited free space for "high quality" compressed files on Google Photos. Google's likely taking a loss by offering that much free space, but it's doing so to tether more users to its data and ad-based ecosystem -- which GoPro lacks. Apple offers 5GB of free iCloud space and paid tiers for more storage. Therefore, it's highly likely that GoPro will launch GoPro Plus as a paid service.

The cloud probably won't save GoPro

I don't want to pass judgment on a product or a platform based on leaked documents alone, but the Hero 5 and GoPro Plus could face some major challenges this holiday season.

The Hero 5 will launch in a highly saturated market of similar looking action cameras with similar specs, and GoPro Plus could suffer from unfavorable comparisons to Google Photos and iCloud. Therefore, investors should hope GoPro prices and markets these products effectively to avoid another Session-like catastrophe.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Leo Sun has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, and GoPro. The Motley Fool owns shares of Microsoft and has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Author

Leo is a Tech and Consumer Goods Specialist who has covered the crossroads of Wall Street and Silicon Valley since 2012. His wheelhouse includes cloud, IoT, analytics, telecom, and gaming related businesses. Follow him on Twitter for more updates!